The 200 series is not ideal for NLK due to range restrictions, and the NLK island government 'put up' with using it because at that stage they were desporate for an operator. They basically 'demanded' at the time that Ansett stop using the F28s due to the noise as there is a historic church which is under the flightpath.
Apparently the contract signed with Ozjet basically stated that they must provide a 'classic' series on the route by a certain date, and if they didn't the contract was over. They apparently did have plans for a 500 but sadly there was no money available to get one, hence Our Airline getting one.
NLK is a strange route in the fact that the loads aren't fantastic and due to it's location you basically need something with good range - 146s/F100s/F28s were always right on the limit of their range to do it 'safely', the 737-500 would probably be the ideal fit but even it's probably a bit on the large side. The weather is crap out there a lot of the time - and diversions and cancelled flights would ruin any profitability and throws the schedule into chaos. Ansett did it for years and I don't think made much on it, but their final straw was when a 737-300 took in a bird and was stuck out there for a week with a 146QT having to take out an engine - cost millions.
Sad it's a pretty enough place but not much to do and reasonably expensive doesn't make it a super popular destination. Sadly from the Oz side they have gone though a LOT of operators - from the NZ side ANZ has been 'old faithful' and has been serving the place for years with the 200 and 300 series 737
One thing is for sure - there is no way 2 operators can survive on the route!